The fourth in a series of articles on health claims sets out FTC's process and remedies, and also provides examples of recent actions taken by the agency. In broad terms, the nation's Food and Drug Administration (FDA) regulates the use of health claims on product labels, while FTC handles claims made in product advertising. However, some overlap may occur when products are being investigated. Process and Remedies Michelle Rusk, from FTC's division of advertising practices, highlighted the following in relation to the agency's enforcement avenues and consequences:
- Administrative or Federal Court - with most of FTC's cases now going into Federal Court
- Broad liability - with anybody actively involved in the creation of advertising being liable
- Injunctions and asset freezes
- Disgorgement/redress
- Suspended judgments
- Criminal liason unit - "Sometimes, civil law enforcement isn't adequate"
She told attendees at Expo West in Anaheim, California, last month, that FTC enforcement priorities are:
- Health and safety
- Promises to treat/cure serious diseases
- Children - "Anything that makes dodgy claims about being good for kids"
- Outright false claims
- Widespread or severe consumer injury
Recent actions In the specialty food and dietary supplement category, weight loss has proved to b a major focus for FTC. "We're never short of targets in the weight loss industry," Rusk stated. Example 1: She highlighted the example of Centro Natural Services, which marketed a weight loss soap and pills. The Spanish language informercial claimed that people using these products could lose 35lbs in two months without dieting, and they would never gain the weight back. The case resulted in a $2.3m suspended judgment, with a 2008 stipulated final order. Example 2: Another case involved Chinery and RTC Research & Development LLC, and the Xenadrine EFX weight loss supplement. This contained green tea extract, caffeine and bitter orange. Marketing for the supplement said that it was "clinically proven to deliver dramatic results". However, an examination revealed that the placebo group lost more weight than the test group. In addition, the weight loss was found to result from rigorous exercise and diet. The company also did not disclose that endorsers of the product had been paid up to $20,000. To date, $8m has been collected for consumer redress. Example 3: Another example involved 7 Day Marketing, Inc, which marketed a 7 Day Miracle Cleanse. This product was referred to FTC by industry (ERSP) - a "good example of industry self-regulation". The informercial made claims for AIDS, Alzheimer's, diabetes, arthritis and weight loss. A 'health man' was also allegedly cured of breast cancer and skin cancer without the need for surgery, chemo or radiation. The case resulted in a $14.5m suspended judgment and a broad ban on all infomercials and all advertising of health benefits. Criminal Liaison Unit FTC, a civil law enforcement agency, also works with criminal authorities to stop most serious consumer fraud. Over the past year, there have been federal and state criminal charges against 81 FTC defendants and their associates; 39 convictions/guilty pleas; and 130 years total prison time. Other articles in the series: Choosing Health Claims FDA enforcement action on health claims FTC's two-pronged approach to ensuring accurate marketing Legal advice to avoid FDA/FTC claim clamp-down